TIF districts allow city to invest in itself

LACONIA — The Downtown Tax Increment Financing District advisory board is considering a color-coded system for city streets among other improvements that would be funded with property taxes set aside for this purpose.

TIF districts, created in Laconia nearly 20 years ago, are local investment funds where a portion of property taxes are earmarked for projects and improvements closest to where the funds were procured.

Property taxes within the district are split into two categories: existing tax revenue relative to assessed property value when the district is formed and property tax revenue based on incremental property value as a result of capital improvements. 

Mayor Andrew Hosmer and city councilors, over the course of discussion regarding the potential purchase of the Laconia Antique Center, noted the possibility of using TIF district funds to offset costs associated with renovations to the building down the line.

If the purchase goes through, the assessed value of the front third of the Bloom's building, which would be redeveloped into an Italian-American restaurant by Melissa Darling and Tyler Hooff, could increase compared to the current value of the antique center. A portion of the increase would be reflected in future tax assessments when budgeting for the Downtown TIF.

City councilors are waiting on the results of a building inspection in order to close the deal. Councilors discussed either using an $800,000 InvestNH grant to fund their $700,000 purchase of the back two-thirds of the building — approved in March by city council contingent on the inspection — or issuing a bond.

In the proposed budget for fiscal year 2025, presented recently to council by City Manager Kirk Beattie, the Downtown TIF is the largest of the three in city limits at $360,472. The Weirs Beach TIF is the second largest, with a proposed budget of $208,800, and the Lakeport TIF is the smallest at $25,000.

Those figures factor in anticipated spending and up to 50% of new property tax revenue created within each district in order to implement local development plans.

While the proposed budget for the Downtown TIF is the largest, the Weirs Beach TIF is calculated to have the most property value, according to the proposed city budget. The Weirs Beach TIF district contains about $209.6 million in property value, while the Downtown TIF is listed at $148.9 million and the Lakeport TIF is listed at $51.5 million. The anticipated property tax rate is $12.71 per $1,000 of assessed value across every district.

The Lakeport TIF is expected to expand in coming years when a Community Revitalization Tax Incentive, or 79-E in the state code, for the development at 51 Elm St. expires, City Planning Director Robert Mora noted at a meeting last week. 

The application, filed by Roland K. Decola of Manchester in September 2021 on behalf of Paugus Elm 1, LLC, based in Dallas, Texas, which owns the property, would allow the 51 Elm St. development to remain partially tax-exempt for up to 13 years, according to the statute. City council approved a three-year exemption for the property in October 2021, which began this year.

The bond payment associated with the Colonial Theatre acquisition — which was announced by the city in 2015 in partnership with the Belknap Economic Development Council for $15 million and resulted in the restoration and reopening of the theater and the development of retail space and apartment units — is $209,000 next year, according to the proposed budget.

Another $51,000 is budgeted to satisfy condominium association fees and $100,472 is slated toward paying for a 2015 bond which funded maintenance and improvements to the Main Street Bridge. About 21%, or $1.7 million of the $8 million bond was included in the Downtown TIF. Those figures make up the expected $360,472 budget for the Downtown TIF. 

The maximum increment that could be budgeted to add to the Downtown TIF is $497,243; the proposed increment is about $250,000.

The Downtown TIF Advisory Board, which offers guidance to city council, met May 22 at City Hall to review their budget and discuss potential uses of TIF funds. The fund had a balance of over $800,000 as of July 1, 2023, and the board noted expenses are also high. 

The board, which includes State Rep. Charlie St. Clair (D-Laconia), who also owns the Laconia Antique Center, and Realtor Warren Clement, is down three vacant positions. Their role is to advise city council on district development and potential expenditure projects.

At their meeting, board members floated potential projects within the district including the installation of an irrigation system for trees and planting downtown, creating a color-coded system for street lines in order to better guide drivers to businesses, and a lighting project which would brighten up bridges and lamp posts and improve the visual aesthetics downtown.

“A sound landscaping plan will bring in a lot to our community and really add to the character that we have downtown and what we want to preserve,” Mora said.

Clement said adding lights to banner poles around downtown could greatly enhance the experience of residents and visitors to the city.

“I’m on the board of Celebrate Laconia," Clement said. "We’re the ones who put the lights on the poles; we’re the ones who put 150 Christmas trees in Rotary Park. The entrance to the city, with the new poles... [does] not have electricity available.”

St. Clair said exploring solar-powered light poles could be an option to electrify light poles downtown and on city bridges without electrical outlets.

“I think that if this was something that the board decided that they wanted to do and move forward with, we could probably find somebody to come in and do a presentation or to give some contractor information,” Mora said. 

Clement said the inner loop on Beacon Street downtown could be painted yellow and the outer loop painted blue to better guide visitors driving downtown to local businesses.

“Follow the yellow loop, when you hit the blue, follow the blue loop and you can go to Hector’s,” Clement said. 

Mora said visual reminders can be a highly effective form of wayfinding that could benefit businesses downtown.

“It is supposed to be simple and it’s those visual cues,” Mora said. “It’s just another tool... The first step to getting somebody downtown is getting them to turn their vehicle downtown.”

Members of the board noted collaborating with representatives of the Weirs Beach and Lakeport TIF districts could be helpful in developing a visual system to guide visitors to important locations throughout all three of Laconia’s villages. 

“They’re all the same, you’re following the same patterns but you’re using it as a marketing tool for your community,” Mora said. 

St. Clair said the same sort of intense development taking place in The Weirs could take place downtown in years to come if the city manages to achieve a historical district overlay there.

“We’ve got to protect what we’ve got," he said. “In my mind, with this TIF, that kind of hangs over the balance because it doesn’t matter if we get wayfinding signs and lights on bridges and stuff like this.

"What’s left of the original downtown here is a nice area.”